Press Metal surges to all-time high as aluminium price jumps on supply concerns from Guinea

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KUALA LUMPUR (Sept 7): Shares of Press Metal Aluminium Holdings Bhd rose as much as 5.4% today to an all-time high of RM5.81 as aluminium price climbed to its highest in more than a decade on the back of concerns over raw material supply amid a coup in Guinea — a major supplier of bauxite.

Bauxite is the feedstock used to make alumina, which is further processed into aluminium, and Guinea accounts for more than half of all imports from China.

At market close, Press Metal settled up 29 sen or 5.3% at RM5.80, making it the fourth top gainer on Bursa Malaysia. Year to date, the counter has risen by 37.8%, valuing the company at RM46.84 billion.

Meanwhile, the aluminium futures traded on London Metal Exchange yesterday closed up 1.37% at US$2,764.51.

Bloomberg reported that a unit of the military seized power in Guinea on Sunday and suspended the constitution, with head of special forces Colonel Mamady Doumbouya urging the army to back him.

While the political unrest raises the possibility of disruption, so far there is no sign that shipments or mines have been affected, according to Bloomberg.

However, the newswire noted that the political instability has already rattled the global aluminium markets as prices in London notched a fresh 10-year high and futures in China climbed to the highest since 2006. 

Last month, Press Metal announced that its net profit surged nearly three-fold in the second quarter to RM255.58 million, from RM90.07 million a year earlier, due to higher aluminium prices. Revenue rose 52.22% to RM2.64 billion from RM1.73 billion.

For the first half of the year, Press Metal said its cumulative net profit jumped 139.47% to RM461.3 million, from RM192.63 million in the previous January-June period. Six-month revenue rose 33.17% to RM4.74 billion from RM3.56 billion.

The group declared a second interim dividend of one sen per share, to be paid on Sept 29.

S Kanagaraju & Joyce Goh